The Russian Council of Shopping Centres RCSC - Российский Совет Торговых Центров (РСТЦ) calls for immediate assistance from regional governors as the average number of visitors decreased by 20% in the first nine months of 2022 compared to the same period of the previous year. The association asks for tax breaks until September 2024. In September, footwear and clothing sales in Russia plummeted by 40% [Российский совет торговых центров разработал меры ... – Retail.ru]
In this business environment, the vacancy rate of the retail space in Russia, which has already reached 25 percent to 30 percent of leasable space, is growing at an abnormal pace, Dmitry Moskalenko, president of the shopping center association, said. It is estimated that non-food retail could slump 35 to 40 percent this year, compared with the pre-pandemic levels.
Ivan Fedyakov, the general director of the Moscow-based think tank Infoline commented that during times of crisis, people abandon unnecessary purchases, which for most customers involve shoes and clothes.
In September, sales of footwear and clothes in Russia slumped by 40 percent year-over-year, Fedyakov estimated.
He added that the entire Russian economy is rapidly losing its customer base. In the past few years, the Russian market has lost 1 percent of customers due to high mortality stemming from the Covid-19 pandemic and an adverse demographic trend in the country. The first mobilization since the second world war initiated by Russian President Vladimir Putin on Sept. 21 promises to aggravate this problem further. Russia is mobilizing troops as part of its war effort against Ukraine, a country it invaded on Feb. 24.
Coupled with mass immigration, the draft could cost Russia 1 to 2 percent of customers, according to Fedyakov.
Meanwhile, Russia is experiencing a surge in the sale of specialized footwear. Over the past few weeks, stores selling military equipment ran out of footwear, while the price for military boots sold on online skyrocketed partly due to demand from conscripts and their family. The Russian federal antitrust agency has opened an investigation to see if the rise in prices is justified.
